Loan Modification Scam

As homeowners seek relief due to financial impacts of COVID-19, loan modification and forbearance are ways to potentially save your house. However, loan modification and foreclosure rescue scams are currently circulating around the country. 

A loan modification or forbearance is where you and your lender or loan servicer agree to modify the terms of your home loan. This could be a lower interest rate, extension of the length of time to pay back the loan, reducing or postponing some of your payments, or any other change of loan terms. 

Scammers often falsely claim that they can guarantee a loan modification or forbearance or stop your foreclosure. They make bold statements about their successes, publicize their supposed expertise, ask for money up front, and then take your money and leave you in worse shape than before. Remember, if it sounds too good to be true, it probably is too good to be true. Legitimate loan modifications are not always possible for every homeowner.

To protect yourself, you can contact your lender directly, consult a free counselor through U.S. Dept. of Housing and Urban Development, or work with a legitimate, licensed and qualified representative. This includes California licensed real estate brokers and California licensed attorneys who represent you. It is illegal for anyone to charge any advance, up-front or retainer fee for loan modification or forbearance services. 

Anyone who has been the victim of such a scam, or who has information regarding a potential illegitimate loan modification or foreclosure rescue, is encouraged to immediately file a complaint with our office through our Consumer Complaints web page here or by calling (707) 253-4059.